Sunday, March 25, 2012

Graetz on Energy

Michael Graetz' End of Energy was published just a bit over a year ago and so far as I can tell, sank like a stone. This is perhaps unremarkable: there's no hook here, no soundbyte, nothing to put the author on The Daily Show. Well: nothing except, perhaps, the title, but the title itself is misleading. Graetz doesn't really talk about the "end" of anything, except possibility the imminent end of our capacity to kick the can down the road, to evade or sidestep any inducement to step up and address our imminent energy calamity (or calamities, if you give climate change a separate category). Whatever; it's a shame he is so neglected. What you've got here is a straightforward, nontechnical account of US government energy policy (and nonpolicy) since...

Since what? Did you guess "the 1973 oil shock?" Close, but no: Graetz starts his story with Nixon price controls in 1971, which more or less got the whole ugly decade off on the wrong foot. The'73 shock figures largely, of course, and indeed the more you read this sort of stuff, the more you come to look back on 1973 as an infliction point not unlike August, 1914, before which everything was great (at least in retrospect), after which not so much so. Graetz moves briskly forward from there through the Ford administration and then to the misfortunate enterprises of poor, perplexed, Jimmy Carter, who did succeed in deregulating natural gas but met frustration in almost every other energy endeavor.

One does have to wonder how much of Carter's disappointing record was bad luck and how much sheer incompetence. Graetz does quote Yale historian Gaddis Smith who said "President Carter inherited an impossible situation and made the worst of it" (Kindle 1860-61). Either way, he is soon swept away by the tides of history carrying in his successor, Ronald Reagan, whose most noteworthy energy accomplishment may have been to take the solar panels off the White House roof (Reagan did vow to get rid of the Department of Energy but found that the old bulls on Capitol Hill weren't about ready to give up that kind of power).

Indeed one of the remarkable themes of the story is that so far as energy policy goes, there was s whole lot of nothing between 1981 and the early 2000s, when "energy" reemerged under the guise of "climate change." And here what you noticed is how amazingly little has changed over the decades. Graetz sums up:

In 2008, just 7.4 percent of our nation's total energy supplies, including biomass, primarily ethanol in fuel, came from renewable sources-compared to about 5.5 percent when Jimmy Carter took office more than three decades earlier. Of that 7.4 percent, more than half is from ethanol and about 2.5 percent still comes from hydropower. Although growing industries, wind and solar power together accounted for about one percent of the total.

Kindle 1704-6. Graetz does identify one area of relative success: the campaign to conserve energy, perhaps most notably CAFE standards for vehicle emissions. But he adds a caution:

Any effort to conserve energy faces four challenges. First, inertia: absent large and obvious cost savings or specific legal requirements, it is difficult to stimulate people to make the kinds of changes that would substantially reduce their use. Second, the size and timing of costs: energy savings often require large up-front costs to achieve small amounts of cost reductions spread over a long period. Third, information and uncertainty: people do not know how much an investment in energy conservation will really save them. Fourth, the frequent mismatch between who will bear the costs of energy savings expenditures and who will ultimately reap the benefits of lower periodic costs: builders, for example, may not be able to recover the costs of energy-efficient features from their buyers.

Kindle 1712-1714. And what happened to generate the long hiatus between the (mostly frustrated) initiatives of the Carter years and the (still frustrated) initiatives of the new century? Graetz doesn't quite say so in words but there is one unifying theme that drives, or fails to drive, the energy agenda: the price of oil Graetz presents the data to show that the inflation-adjusted price of oil peaked at just about the end of the Carter years; then fell, and did not exceed its earlier peak until 2008. Man, if gasoline ever hits $4 a gallon, there's no tel-- oh, right.